Ten Points: Yakupov, Musil, And Relocation

After the jump: Nail Yakupov can’t play in Russia, Oilers’ ownership hints that it might consider moving the team to Seattle, and Glen Sather trades for the wrong Marchant, eventually leading to one of the greatest goals in Oilers history.

1. Yakupov suspended in Russia. I’ve already written at some length on the news that Nail Yakupov cannot play in KHL games until the IIHF rules on his transfer from the OHL’s Sarnia Sting to the KHL’s Neftekhimik Nizhnekamsk, but I’ll summarize my view based on talking to people with knowledge of the situation both publicly and off the record and reading the reports of media members who follow the CHL and KHL closely:

It sounds like this action is being taken by Hockey Canada more for the sake of the CHL than for the Oilers or Sting

Edmonton seems open to Yakupov spending the lockout in the KHL while Sarnia did not expect the player to return.

With that said, I was told by Hockey Canada that their position is “that Yakupov has a contract with the Sarnia Sting of the OHL that runs through the end of the 2012-13 season, and should therefore be playing with Sarnia.”

Other players have made the jump to Europe without this sort of impediment. Yahoo’s Neate Sager has reported that the Oilers’ assignment of Yakupov to Sarnia may be the issue. While that’s possible, a source with knowledge of the OHL suggested to me that the real issue is that Yakupov’s profile makes him an easier target than Alex Khokhlachev or Nicklas Jensen.

As for what happens in the end? I don’t know but Yakupov’s been clear that a) he wants to play in his hometown and b) he wants to play against men, not junior-aged players. I expect that, irrelevant as the player’s wishes seem to be in this political process, at the end of the day Yakupov will play where he wants to play. Of course, if the lockout ends then he’ll just come play in Edmonton.

2. The Oilers could recall… David Musil?According to Bob McKenzie of TSN, the Oilers made a point of ensuring that 19-year old defenceman David Musil (along with, of course, Yakupov) would be eligible for recall when NHL play resumes. Lowetide commented on this yesterday, but I couldn’t help including it because it really is telling as to how the team sees the player.

Musil’s still extremely unlikely to make the team at any point in 2012-13, but he could challenge at the 2013 training camp, and I expect he’ll be a full-time Oiler or close to it by 2014.

3. A public relations fiasco. There’s a delicate art to making a threat, and the Katz group blew it badly in their latest visit to Seattle. Appearing in Seattle was not a problem. Even making sure someone knew they were in Seattle wouldn’t have been a problem. Making an explicit statement that the Katz group was in negotiations with other cities – and then putting it on the team’s website – was an idiotic move.

Why was Katz in Seattle? Given that the threat of relocating there is largely nonsensical, it’s a bargaining ploy. It’s a bargaining ploy dismissed by the majority – including the mayor of the city. Because it was a weak threat, the overarching message I’ve seen repeated among fans is not ‘oh my goodness, the team might move!’ but rather ‘the guys running the Oilers are acting like jerks.’ Because of that, it’s difficult to see how this ploy gained the Katz Group anything other than ill will.

Had they played it more subtly – saying something along the lines of ‘the Katz Group remains committed to Edmonton’ while showing up in Seattle – the threat would have been implicit rather than explicit, and ill will would have been reduced. The way they actually did it was ham-fisted.

4. The Oilers television ratings are excellent. The point is often made that Edmonton lacks the kind of corporate sponsors who pay big advertising dollars, but at some point other factors – the size of the audience (big), the affluence of the audience (Northern Alberta is rich) and the passion of the audience (a hockey team in Edmonton connects more on an emotional level than it could be expected to in another city) overrule those factors. In Jason Gregor’s excellent article the other day on the possibility of Seattle relocation (linked above), he used San Jose (a nearby American team) as a comparable, which seemed reasonable. According to ratings data, the Oilers averaged more than 180,000 viewers for regional games on Sportsnet West while San Jose’s audience was 33,411 households – approximately equivalent to 77,000 total viewers.

5. Would the city be better off if the EIG still owned the team? I very much doubt it. At the end of the day, the difference between ‘I’m unwilling to pay for a new arena’ and ‘I’m unable to pay for a new arena’ is a small one – in either case, the city ends up footing a big chunk of the bill. I have very little doubt that the EIG would have been lobbying just as hard for public money as Katz is. As former owner Bruce Saville said in a recent interview, the arena might have been built already, “but not with our money.”

6. ”Fractured” ownership. Speaking of the Saville interview, his confirmation that the EIG was fractured when Katz bought the team is an interesting one (Side point: I think both the interview and the subsequent article on the Oilers’ official website were in response to this story, though the radio interview cited only “some bloggers” and the web story mentioned “recent reports”). Here’s the quote:

I think [Katz] used the term that it was ‘fractured,’ and it was. Not in public, but behind boardroom doors and shareholder meeting doors, it was fractured. There was a key problem. There were 37 owners. We got together for one purpose, and that was to save the team until we could get a new CBA and then we would either sell the team or fold it if the new CBA wasn’t acceptable. We did that, we had a cash call after we put our first money in, and we got it to the CBA. We thought we got a pretty good CBA and then it seemed everybody lost their appetite to follow through and sell the team, but we didn’t need to fold it then because we had a good CBA.

Three points here are worth considering: the degree of the fracture, the impact of time, and Saville’s personal perspective. First off, there’s no question that there were some difficulties within the EIG. Perusing both the published record and talking off the record to people with knowledge of the situation, it’s clear that there were personal problems within the ownership group, among them the fact that the larger shareholders felt at times like the smaller members of the group were ganging up on them.

However, on August 7, 2007, when the EIG board met to discuss selling to Katz for $185 million, something interesting happened. Thirty-two of 34 owners – more than 94% of the group – voted not to sell. Likely not coincidentally, two owners spoke in favour of selling to Katz at the time – and one of them was Saville. From the article linked above:

Only Saville and Ed Bean argued strongly in favour of selling to Katz. Saville had been unhappy with the way the board functioned right from the start and that had soured him on the EIG. As for Bean, he said Edmonton’s future was with a younger and richer man such as the 46-year-old Katz, a person with drive and vision to raise the team to the next level.

As time went on (and the price went up), more owners voted in favour of selling, until eventually Katz had the support he needed.

So, I’d make two key arguments about Saville’s comments. First: the EIG had internal squabbles, but nothing that put the team in jeopardy, and it was a ton of money rather than fractured unity that ultimately led to the Oilers being sold to Katz. Second: I have no reason to doubt Saville’s sincerity or honesty, but there’s every reason to think that he was one of the unhappiest members of the EIG, and it’s clear he was an early supporter of turning the team over. So while I take him at his word, I also think it likely that his view of the situation was more negative than most EIG members.

7. The league perspective: relocation vs. expansion. Many smart people – including Don Levin, who is widely expected to own an NHL team in Seattle when the NHL moves there – believe that the NHL will expand in the near future. Levin went so far as to say as he believed any team in Seattle would be awarded through expansion rather than relocation.

While expansion is not popular with many fans, one of the things expansion does is put more money in owners’ pockets than relocation. For example, when the Thrashers moved to Winnipeg in 2011, the NHL received a relocation fee of $60 million. When the Minnesota Wild entered the league in 2000, they paid an expansion fee of $80 million – the equivalent of more than $100 million today. With franchise values on the rise, even that $100 million may be a low-end estimate for putting an NHL team in a decent market.

8. The terror of 1998. In 1998, when the Oilers were sold to the EIG and relocation was a legitimate threat and top of mind for everyone, there were two unique factors. First, the Canadian dollar was trading at an insanely low rate – worth just 63 cents against the American dollar in 1998. In the 40-year history of a floating Canadian dollar, it was never worth less than it was in the late 1990’s/early 2000’s. It’s previous worst was in the mid-1980’s when it briefly dipped to just below 70 cents on the U.S. dollar. The other issue is population: at the time of the 1996 census, the City of Edmonton had just over 600,000 residents. Today, that number is in excess of 800,000. Note: Those are city populations, not metropolitan area populations (as originally claimed and subsequently corrected in this piece). The metropolitan area has grown from roughly 860,000 to 1,150,000 today in the same time period, a nearly identical percentage increase – jw.

Combine a 33 percent spike in population with the fact that historical lows in currency are – by definition – a rare event, and it’s easy to see why the current situation with the Oilers is absolutely nothing like 1998.

It’s nice enough to show twice.

9. The greatest Todd Marchant story ever. According to former New York Rangers general manager Neil Smith, when the Edmonton Oilers traded for Todd Marchant (who would go on to play nearly 1,200 NHL games), they didn’t really plan to trade for Todd Marchant. From Behind the Moves:

All year, I was telling Sather, ‘I want [Craig] MacTavish at the deadline because you are going to miss the playoffs and I need a fourth-line, penalty-kill, faceoff guy.’ So the deadline comes. And what he really wanted from me was a big, tall defenceman in the minors who I wouldn’t trade to him because I thought he was a great prospect. I said to him, ‘I’ll trade you Todd Marchant.’ So we made the trade. I swear on this: the next day, Sather called me and he said, ‘You f—ed me on this trade. Marchant is f—-ing 5’8”.’ I said, ‘I know he is.’… Sather said, ‘F—! It says in the book that he is 6’1”.’ I said, ‘You’re looking at the wrong Marchant. That’s his brother,’ because Todd’s brother was in the book, too. [Glen] thought he was trading for the other Marchant, I swear to God.”

Aside from the fact that it’s a great story, a few points:

Terry Marchant was drafted by the Oilers that summer. The 6’1” center bounced around the minors after college but never got close to the NHL.

Todd Marchant was 20 at the time of the trade. I’m not sure what his height was listed at in March of 1994, but I’ve always seen it at 5’10”, which wouldn’t be surprising given how the official size of players is often reported to be exaggerated.

It’s hard to know which defenceman Smith was talking about, but the only AHL regular on the Rangers’ farm team who went on to have a significant NHL career was Mattias Norstrom. Norstrom was eventually dealt to Los Angeles two years later in a deal that saw the Rangers add former Oilers Jari Kurri and Marty McSorley.

It’s complex stuff. But what it comes down to is that when NHLPA executive director Donald Fehr says the players don’t really get 57 per cent of HRR, these cost exemptions are what he’s talking about. As revenues rise to last season’s record of $3.3 billion, the value of those direct costs increases as well because they’re all percentage-based. I’ve seen the NHLPA use 51 per cent as the actual number.

The big, obvious point is that many NHL fans don’t know that hockey-related revenue is calculated after a bunch of deductions are made for expenses. So when people talk about all of the expenses coming out of the owners’ 43 percent, that’s not entirely accurate – many are deducted beforehand. There’s lots of other interesting stuff in there, though – including some points directly related to Edmonton.

There’s no way to know exactly what kind of deal might have been struck with the EIG, but the “fact” that they wouldn’t have contributed a single dollar to a new (downtown, I still assume?) arena doesn’t necessarily mean it would have been a “worse” deal for the city of Edmonton – it’s possible such a deal would have been structured to see EDM get a portion of revenues, more more from a higher ticket tax, etc.

That’s true of course, but I guess what I’m getting at is the perception that things would have been different if the EIG were negotiating instead of Katz. It’s not an angle I buy; the EIG would have negotiated as hard as they could and would have done similar lobbying and pressure ploys, IMO.

3 things; first, thanks for the article. Second, the Saville interview uses the word ‘fold’. Can you elaborate on this please? I can’t believe that there was ever any discussion about folding the oil, as I understand the term. Third, statsCanada lists Edmonton’s metro population as presently 1.196 million.

I can’t really elaborate on Saville’s use of the word “fold” other than to say that if the team a) was losing money badly and b) couldn’t find a buyer I suppose it was always a (remote) possibility.

On the metro population, thanks that’s my mistake. I was looking at the urban population for both years and said the metropolitan area (the figures are similar and the point’s the same, but it is an error). I’ll correct it above.

On point 7 I HATE the idea of expansion because it has been bad for the game in many ways. The owners love it because it puts millions in their greedy pockets and the players like it because it means more jobs.

Fans should hate it because it waters down the quality of play and because initially it created too many loser franchises in non-hockey markets such as Phoenix, Florida, Nashville and Columbus, which is part of our current problems and more expansion will also prevent moving some of these hopeless franchises to more promising markets such as Quebec City, greater Toronto area and possibly Seattle, making for a healthier league.

Of course the other push behind expansion was the dream of a massive US national TV contract with the $200 million per year they get does not represent.

A question JW. Do you think there is ANY way the Oilers, possibly by partnering with the Flames and maybe even the Jets as well, could create their own pay subscription TV channel like MSG, showing all the games, repeats of games, historical games after purchasing the rights, regular shows devoted to the teams, plus odds and ends related to hockey. Theoretically they could make a lot more money that way than with Sportsnet and TSN, while still partnering with HNIC.

I am NOT saying this viable. I don’t know. Presumably if it was it might well have been tried. I am just asking what you think.

Unfortunately, I can’t really answer your question. It’s an interesting idea, to be sure, but I just don’t have enough of a handle on the logistics and the current deals in place between those teams and their respective rights holders to give you an intelligent response.

Regarding the threat about moving the Oil to Seattle being a PR disaster for Katz & company… in hindsight, should we have expected more from the same management team that brought you these famous and very public gems:

Spend your Summer Begging for Dany Heatley while Three Players Wait in the Balance for a Decision on the Trade?

Let’s Fight with Sheldon Souray and Banish Him to the Minors While Paying Him Millions?

Let’s Trade Ryan Smyth Over a Difference of $100,000 per year?

Let’s Fire MacT and Replace Him with Quinn Because He Lost the Faith of the Players?

Let’s Fire Quinn and Replace Him with Renney Because Quinn’s Coaching from 1974?

Let’s Take 4-6 Weeks to Decide if We Should Let Renney Go?

Let’s Rehire MacT Because Although He Can’t Be Our Coach, He Can Help Us Manage the Team?

Why Won’t Any UFA’s Sign Here (2007 to 2010)?

Why Won’t Any Good UFA’s Sign Here (2011 to Present)?

So, adding “Hey, Let’s Piss Off Thousands [Millions?] of People By Threatening To Move One of the Few Money Making NHL Franchises to Seattle Over a Lease Dispute” should be no surprise at this point.

RE: The greatest Todd Marchant story ever…LOL! And that 5’8″ guy went on to have a very nice NHL career. So Slats was thinking that size is all that matters at centre, and got proven wrong. At least everyone that complains about having small centres will be in good company.

He said and I’m paraphrasing, “there are currently no teams for sale so I expect expansion will be how we get a team”.

All that changes if there IS a team for sale.

The Hansen group in Seattle has a HUGE motivator to get an NHL team sooner rather than later since a part of their agreement with the city of Seattle and the county is that funding for a new arena increases by $80 million if an NHL team is part of the package.

Levin: “I can tell you there are not teams for sale that are available to move.”

He then went on to rule out the New York Islanders (saying the team would “never” move) and the Phoenix Coyotes. But, yeah sure, the Oilers are *totally* going to move.

As for that $80 million, it gets a lot less impressive when you realize that Katz won’t have any control over a Seattle arena and that Edmonton’s already putting up $150 million ($125MM for the building, $25MM for the land) to pay for the new arena, plus cost overruns, plus taking out the loan on the $225 million that Katz/ticket tax will repay over time, plus the 10 year/$20 million advertising deal, plus whatever else Katz is able to squeeze them for in coming days.

To quote a guy who shows up in this comment section sometimes, “money talks.”

Sure we do. We know it won’t be more generous than the deal Hansen worked out to build the Seattle arena in the first place – a deal decidedly less generous than what Katz has been offered here in Edmonton.

Do you know how many teams in the U.S. drew more eyes than the Oilers last season? I’ll give you a hint: you can count them on one hand.

Among the markets that didn’t draw more eyes than the Oilers are Phoenix (12th-best TV market in the U.S.), Detroit (11th-best TV market in the U.S.), Atlanta (7th-best TV market in the U.S.) and Los Angeles (the 2nd-best TV market in the U.S.).

They aren’t going to draw viewers from Vancouver. Those viewers are already watching Vancouver. You also didn’t follow JW point of how those huge TV markets don’t watch hockey at all, if they did Pheonix wouldn’t be in the situation they are and the Thrashers wouldn’t be Jets.

Err, do you know how many Canadians live in Silicon Valley? Or how many Americans from northern states live there? Do you realize the proximity to San Francisco, of the U.S.’ largest and most affluent cities? Or that the surrounding N California micro-region boasts about 10 million tv sets?

Seattle boasts the Microsoft and Boeing campuses, a 45-minute drive to downtown, or the same distance from SFO to the campusues of the mighty Cisco.

They’re highly comparable markets. In fact, comparison with San Jose is being generous to Seattle.

I never once compared their TV numbers. I compared their ticket prices, and I think San Jose would likely be comparable to what Seattle will charge. Seattle won’t be able to charge the same price as Edmonton.

The Edmonton metro population was from 2011 census .
As our population has increased at about 2 percent a year since 2006 we are probably about 1225000 in 2012.
We have busloads of people coming in for games from places as far away as Ft Mac and grande prairie .Our hockey metro area is all of Alberta from Red Deer north.

Speaking of official stats exaggerating the height of players, who’s witnessed this in real life?

I remember when Taylor Hall was listed as 6’1 1/2″, then it went down to 6’1″, and at one point I read 6′ 1/2″. I met him at prospect camp in 2010 and given my height of 5’10”, I’m sure that Hall is 6′, maybe 6′ 1/2″, but not 6’1 or 6’1 1/2″.

Also, 5’11” Joe Sakic and I bumped into each other and looked the other square in the eye at the Staples Center back in 2001 or 2002, so I’m pretty sure he’s only 5’10.

I’m in Victoria, I’m a oilers fan. But no, I would want nothing to do with them if they moved out here. DSF you’re a bit foolish to believe Oiler fans would follow them to Seattle… Or that Seattle would draw in outside viewership. This isn’t baseball and this isn’t the annual blue jay trip 😉

If the oilers moved so would my loyalties.( maybe out of hockey all together.) I use to be an Expo fan. I sure don’t think of the nationals in the same way. Or baseball. I would probably cheer for the Jets.

Bettman has ties his wagon to a more lucrative deal than Seattle. The Southern Ontario market will see an expansion fee in the 300-400 million dollar range. The Quebec City deal is a go once the Arena is built. It would be foolish to think that the Florida Panthers will remain in Florida once that arena in QC is built. The Panthers are DOA when that becomes a reality. Seattle is pie in the sky. Where will the Revenue streams come from? The ownership would need to own both the NBA an NHL franchise and the Arena to make a go of it in Seattle. Not going to happen anytime soon. Quebec City will be ready 2015. Southern Ontario? Who wouldn’t write that cheque in Southern Ontario.

Lastly. The NHL has once again tarnished its brand with this lock out. The stupidity of this situation is mind boggling.Its like 2 kids saying My Dad is tougher than your dad an then finding out that neither Dad is what they think they are. It really sucks to be a fan and be subjected to these childish antics every few years. Bettman is a Lawyer for goodness sake.You’d think he would show more intelligence when dealing with the NhLPA.As it is he is no better than a first year graduate at his first court appearance. He looks inept and appears to not know what he is doing. Sad.

Everyone rags on Bettman and its stupid. Sure he is a arrogant smarmy ass headbobbing worm. Disliking him is easy as hell. But saying he sucks at his job is just false. For a guy who largely follows what he clients (29 owners) want he sure gets credit for being the mastermind behind the lockout from everyone that hates him.

Bettmans job is to get them money, (long term sustainable money and if losing a few months of the season gets them more of that then the owners love him. Just because we dont like what he does doesnt mean he isnt good at it.

Grow up people, if were going to bash him, do it because he does that weird creepy thing with his eyes, not because hes “like a first year lawyer”

On Saville, I wouldn’t question his take on the situation. That said, the funny thing with having so many owners is that it isn’t that hard to come accross one. Be it socially or in business so getting an insight to behind the the scenes isn’t quit difficult as it is when there is only a single guy in charge.

From other perspectives, Saville’s accounting of it seems fair with the exception of the implied or interpreted impression that a sale or even a shake up of significant proportions was imminent due to some group discontent.

The bottom line still remains that until Katz started making offers for the team, things were pretty much proceeding with business as usual. Internal disagreements included.

Just as an add on, another item that I have heard expressed is that some owners never could understand why once Katz started making public offerings that the result was a public that effectively turned on the EIG. That suddenly the EIG was seen as a clumsy hinderance where as Katz was seen as a saviour. A needed one or not.

Perhaps it’s a case of the fans now getting what we asked for?

On the EIG negotiating on an arena;

One thing that I think tends to get overlooked is that when the EIG took over the team the Oilers very much felt like a community owned team.

There is always a segment of people/fans/bloggers who tend to believe it is their job to disect and critisize but in the halls of Rexall the EIG was generally considered a saviour of the Oilers and they managed to create a connection of good will with the fans that never existed before and hasn’t existed since.

So the big question probably isn’t If the EIG would have negotiated or needed a sweet heart deal but moreso If there would have been more of a public appetite to give them that sweet heart deal.

I am thinking there would have been, but that’s just me.

The one big sacrifice probably being the all in one entertainment district that Katz is proposing.

On the TV markets;

Has anyone seen what Phoenix draws for viewers?

I want to think that the main reason that Phoenix was ever pushed as an NHL location in the first place was because they were one of the largest TV markets in the States.

Taking a look at those numbers could be all telling in terms of how the small media market/die hard fan market VS fair weather fan/big media markets shake out.

Just wanted to drop by and say thanks to DSF. Despite there being no hockey to amuse ourselves, he’s doing his best to keep things interesting here.

At this rate Oilersnation may soon need to sponsor some sort of padded weapon street brawl. Much like the Road Hockey for Cancer gig. Many a feathers would be ruffled during an event such as this, maybe even knock Newages pop bottle glasses off.

Padded jousting poles from 50 yds on tricycles, Brownlee would be going down quicker than pancakes with Penner.